U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > New York > Westchester County
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Closed Thread Start New Thread
 
Old 12-04-2013, 05:47 PM
 
581 posts, read 1,221,730 times
Reputation: 444

Advertisements

A single friend looking at houses for $550,000 with $4k taxes.
Planning on putting $150k down and taking a mortgage for $400k.

This person is maxed out in their career and earns $100k.
It will not go up in the future.
Can 100k income really get approved for a $400k mortgage?
Will this really crap this person's lifestyle?

Would they have to do some sort of 5/1 ARM?
If so, do you just keep refi'ing every 5 years to keep it sustainable?
Rate this post positively

 
Old 12-04-2013, 06:34 PM
 
7,296 posts, read 11,159,188 times
Reputation: 3254
Yes they can afford it but there are better ways to invest their savings than buying a house that costs 5x their pretax income. Might be better to rent and invest the remainder in index funds. I don't think there are a lot of houses that appreciate by over 5% a year over the long term.
Rate this post positively
 
Old 12-04-2013, 07:16 PM
 
13,936 posts, read 14,190,086 times
Reputation: 7415
Quote:
Originally Posted by ShouldHaveLeft914 View Post
Can 100k income really get approved for a $400k mortgage?
Will this really crap this person's lifestyle?
The rules for mortgages changed dramatically in the last 15 years. Anyone who puts 20% down now on a house can get approved by the bank for what used to be considered "usury". The bank figures that they can always get it back on a foreclosure.

The answer to question #2 is probably.
Rate this post positively
 
Old 12-04-2013, 07:19 PM
 
Location: Texas
44,253 posts, read 60,692,010 times
Reputation: 73780
They could probably technically afford it but it would be a stupid move.
Rate this post positively
 
Old 12-04-2013, 08:50 PM
 
581 posts, read 1,221,730 times
Reputation: 444
$400k mortgaged at 4.25% is about $2500/mo. including $4k taxes and $2000/yr insurance.
Take home salary for $100k would be about $6000/mo.

And $2500 is comparable to renting a 2B apt.

Actually, I guess it's quite doable.
Maybe even smarter than renting.
I guess I just needed to run the numbers.

Last edited by ShouldHaveLeft914; 12-04-2013 at 09:06 PM..
Rate this post positively
 
Old 12-05-2013, 07:31 AM
 
7,296 posts, read 11,159,188 times
Reputation: 3254
Actually in the first 10 or so years, most of that monthly house payments will be going to interest expense, taxes and insurance. Then you need to account for other costs such as updating and what not. I'm amazed that there is such a home with only $4K/year in taxes. Most of the time your expenses will be exceeding what goes to pay down the mortgage. So if they can find a $3K-$4K/month rental house in a good SD, then they should be at parity with buying on mortgage especially if they have kids to send to school.
Rate this post positively
 
Old 12-05-2013, 12:11 PM
 
Location: Westchester, NY
192 posts, read 346,283 times
Reputation: 225
Quote:
Originally Posted by ShouldHaveLeft914 View Post
A single friend looking at houses for $550,000 with $4k taxes.
Planning on putting $150k down and taking a mortgage for $400k.

This person is maxed out in their career and earns $100k.
It will not go up in the future.
Can 100k income really get approved for a $400k mortgage?
Will this really crap this person's lifestyle?

Would they have to do some sort of 5/1 ARM?
If so, do you just keep refi'ing every 5 years to keep it sustainable?
The $4k in taxes for $550k home is most likely not going to happen. I'm in the market for a house and currently actively looking. I have not run into a house with $4k in taxes yet. I don't think they are out there in Westchester. If they are please, please tell me where they are so I can go look there.

On the average I'm finding $10k+ for a $450k home.
Rate this post positively
 
Old 12-05-2013, 12:35 PM
 
7,296 posts, read 11,159,188 times
Reputation: 3254
/\/\

An dif that house is in NYC where RE taxes are lower then it's likely they'll need to pay city income taxes over and above (plus additional $$ for private services).
Rate this post positively
 
Old 12-05-2013, 05:46 PM
 
581 posts, read 1,221,730 times
Reputation: 444
The house is in CT.
Rate this post positively
 
Old 12-05-2013, 09:08 PM
 
Location: Virginia
475 posts, read 812,984 times
Reputation: 430
I don't think I would over extend myself like that. One mishap and it's all over. Here in the great old south I was able to save and buy a house cash. Down here you can buy a modest home for 65-100k. I would say that if his/her income cannot go any further up but home prices can, I don't think it is a wise investment.
Rate this post positively
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Closed Thread


Settings
X
Data:
Loading data...
Based on 2000-2020 data
Loading data...

123
Hide US histogram

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > New York > Westchester County
Similar Threads

All times are GMT -6.

© 2005-2022, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top